1 00:00:00,080 --> 00:00:03,720 Speaker 1: Meridian Energy has quadrupled its net profit to four hundred 2 00:00:03,720 --> 00:00:06,120 Speaker 1: and twenty nine million dollars for the year. Earnings we're 3 00:00:06,200 --> 00:00:08,119 Speaker 1: up sixteen percent. The company will pay a dividend of 4 00:00:08,160 --> 00:00:11,879 Speaker 1: twenty one cents a share. Company is tempering expectations, though, 5 00:00:11,920 --> 00:00:14,080 Speaker 1: saying the twenty twenty five financial year is looking far 6 00:00:14,160 --> 00:00:17,440 Speaker 1: more challenging. Neil Barclay is Meridian's chief executive and. 7 00:00:17,360 --> 00:00:20,200 Speaker 2: With us, Hey, Neil, hi, how are you? 8 00:00:20,400 --> 00:00:20,599 Speaker 1: Yeah? 9 00:00:20,600 --> 00:00:20,760 Speaker 2: Good? 10 00:00:20,800 --> 00:00:21,160 Speaker 1: Thank you? 11 00:00:21,200 --> 00:00:21,360 Speaker 2: Ah. 12 00:00:21,560 --> 00:00:23,439 Speaker 1: It's kind of awkward, isn't it to be to be 13 00:00:23,520 --> 00:00:26,440 Speaker 1: reporting a big profit increase like this when everybody's just 14 00:00:26,640 --> 00:00:28,480 Speaker 1: hating on gen Taylor's. 15 00:00:29,560 --> 00:00:32,280 Speaker 2: Yeah, well, I think the thing to understand with our numbers, well, 16 00:00:32,320 --> 00:00:35,200 Speaker 2: we are a renewable energy generator, so our results swing 17 00:00:35,200 --> 00:00:38,040 Speaker 2: around a lot with the weather. And the interesting thing 18 00:00:38,080 --> 00:00:40,640 Speaker 2: about the growth in this year's number, it's largely because 19 00:00:40,720 --> 00:00:43,600 Speaker 2: last year's number was very low at ninety five million, 20 00:00:44,280 --> 00:00:46,879 Speaker 2: and actually F Y twenty four is pretty consistent with 21 00:00:46,920 --> 00:00:50,960 Speaker 2: what FY twenty two, in FY twenty one, where so 22 00:00:51,040 --> 00:00:54,320 Speaker 2: it was more we had a bit of a low 23 00:00:54,720 --> 00:00:58,880 Speaker 2: number in twenty three than we had massed growth in 24 00:00:58,920 --> 00:00:59,440 Speaker 2: twenty four. 25 00:01:00,080 --> 00:01:02,440 Speaker 1: You're not making any more of us than than you normally. 26 00:01:02,440 --> 00:01:05,880 Speaker 2: What are you saying, Well, not in that year, but 27 00:01:06,280 --> 00:01:11,520 Speaker 2: certainly right now we are. Earnings are down quite a lot. 28 00:01:12,319 --> 00:01:15,640 Speaker 2: We're investing a lot in hedges and so forth to 29 00:01:15,720 --> 00:01:18,720 Speaker 2: sort of ensure that we've got security of supply, and 30 00:01:19,480 --> 00:01:20,920 Speaker 2: I think I'm going to talk to you about some 31 00:01:20,959 --> 00:01:23,200 Speaker 2: of those last week. But the ends are still we're 32 00:01:23,200 --> 00:01:26,720 Speaker 2: paying them to reduce demand. We're part of that meth 33 00:01:26,760 --> 00:01:29,760 Speaker 2: and X arrangement. We were actually paying quite a lot 34 00:01:29,800 --> 00:01:32,000 Speaker 2: of quite a high price for the gas that we're 35 00:01:32,040 --> 00:01:36,199 Speaker 2: generating from them at the moment, and so we're telling 36 00:01:36,200 --> 00:01:39,400 Speaker 2: analysts and investors just to be a bit tempered with 37 00:01:39,520 --> 00:01:40,640 Speaker 2: how it will turn out this year. 38 00:01:41,080 --> 00:01:42,680 Speaker 1: Why do you think next year is looking so bad? 39 00:01:42,720 --> 00:01:43,440 Speaker 1: What's the problem. 40 00:01:44,760 --> 00:01:49,040 Speaker 2: It's just that there is not enough. The lakes at 41 00:01:49,080 --> 00:01:51,640 Speaker 2: are very low level, so we've had to back off hydrogeneration, 42 00:01:52,120 --> 00:01:54,600 Speaker 2: and so we're by this is from a Meridian perspective, 43 00:01:54,600 --> 00:01:57,720 Speaker 2: we're buying generation from other sources. That's what I'm saying. 44 00:01:57,720 --> 00:02:00,600 Speaker 2: We're part of that methd X thing or paying to 45 00:02:00,600 --> 00:02:03,960 Speaker 2: the ends. It's not to actually produce son. 46 00:02:03,880 --> 00:02:06,080 Speaker 1: Neil, do you foresee that we're going to have a 47 00:02:06,160 --> 00:02:07,600 Speaker 1: dry year, next year again. 48 00:02:09,120 --> 00:02:12,720 Speaker 2: No, No, the lakes. I'm not that clear, boy, not 49 00:02:12,760 --> 00:02:17,079 Speaker 2: a problem. I can't guarantee that either. I can't pack 50 00:02:17,080 --> 00:02:18,799 Speaker 2: the weather that far out. I can pick the weather 51 00:02:18,840 --> 00:02:20,560 Speaker 2: about seven days out, and that's about. 52 00:02:20,400 --> 00:02:22,200 Speaker 1: As good it will tell me this. Okay, Because you 53 00:02:22,240 --> 00:02:23,959 Speaker 1: guys obviously do keep an eye on what's going on 54 00:02:23,960 --> 00:02:26,720 Speaker 1: with the hydro dams. Do you feel completely comfortable about 55 00:02:26,760 --> 00:02:29,400 Speaker 1: dipping in knowing that next year will be fine? 56 00:02:30,200 --> 00:02:35,200 Speaker 2: Well, we've got enough hedges, and hedges are designed to 57 00:02:35,560 --> 00:02:38,760 Speaker 2: get a physical reaction, so that's either dropped demand or 58 00:02:38,760 --> 00:02:41,160 Speaker 2: bring on other supply. We've got enough hedges in place 59 00:02:41,400 --> 00:02:45,160 Speaker 2: right now to restore these lakes back to average if 60 00:02:45,200 --> 00:02:46,600 Speaker 2: we get average inflows. 61 00:02:47,240 --> 00:02:50,639 Speaker 1: Okay, so to hang, yes totally. But it does rely 62 00:02:50,720 --> 00:02:52,760 Speaker 1: on us having average inflows. Right, So we are kind 63 00:02:52,760 --> 00:02:54,000 Speaker 1: of at the mercy of the weather again. 64 00:02:53,840 --> 00:02:57,120 Speaker 2: Aren't we. We We always have been. That's the nature 65 00:02:57,160 --> 00:03:00,000 Speaker 2: of our electricity system, that hydro based. And we've got 66 00:03:00,080 --> 00:03:04,560 Speaker 2: relatively small lakes, but you know, and we're working to 67 00:03:04,600 --> 00:03:07,440 Speaker 2: try and get more capacity in those lakes. So that's 68 00:03:07,480 --> 00:03:09,320 Speaker 2: that contingent storage Neil. 69 00:03:09,880 --> 00:03:12,160 Speaker 1: One of the criticism, One of the criticisms of the 70 00:03:12,240 --> 00:03:14,000 Speaker 1: energy sector at the moment is that you guys aren't 71 00:03:14,040 --> 00:03:16,840 Speaker 1: building enough generation. How much generation have you built in 72 00:03:16,880 --> 00:03:17,480 Speaker 1: the last year. 73 00:03:19,560 --> 00:03:22,560 Speaker 2: Well, I'll tell you, I'll go back fifteen years because 74 00:03:22,600 --> 00:03:23,120 Speaker 2: I think. 75 00:03:22,960 --> 00:03:25,600 Speaker 1: That the last year doesn't look good. 76 00:03:26,240 --> 00:03:29,799 Speaker 2: The last year looks good. We've just built a new 77 00:03:29,840 --> 00:03:33,040 Speaker 2: wind farmans in Hawk's Bay, Horror Parky. We're in the 78 00:03:33,040 --> 00:03:36,640 Speaker 2: middle of building a grid scale battery. We've invested a 79 00:03:36,680 --> 00:03:40,080 Speaker 2: billion dollars in the last few years. Just Meridian, if 80 00:03:40,080 --> 00:03:42,160 Speaker 2: you look across the sective numbers a lot greater. But 81 00:03:42,200 --> 00:03:44,520 Speaker 2: if if you look at the electricity sectory the last 82 00:03:44,560 --> 00:03:48,240 Speaker 2: fifteen years, demand hasn't grown a bit. The system is 83 00:03:48,360 --> 00:03:51,000 Speaker 2: exactly the same size as it was fifteen years ago. 84 00:03:51,920 --> 00:03:54,920 Speaker 2: But in that time the sector across the board has 85 00:03:54,960 --> 00:03:58,400 Speaker 2: invested ten billion dollars in new renewable energy and that's 86 00:03:58,440 --> 00:04:02,640 Speaker 2: replaced aging and gas flight plant. So we've been invested 87 00:04:02,680 --> 00:04:07,000 Speaker 2: in a halivar rate. It's just an absolute myth that 88 00:04:07,520 --> 00:04:10,240 Speaker 2: generators have not been investing in It's just wrong and 89 00:04:10,280 --> 00:04:12,200 Speaker 2: it just keeps getting put. 90 00:04:12,080 --> 00:04:15,720 Speaker 1: Out there by c It has generation not dropped off 91 00:04:15,800 --> 00:04:19,400 Speaker 1: since the Labor Party of twenty seventeen, the Labor Government 92 00:04:19,400 --> 00:04:21,960 Speaker 1: of twenty seventeen putting that one hundred percent renewable targeting. 93 00:04:23,360 --> 00:04:26,960 Speaker 2: No what, no renewables kept being developed. 94 00:04:27,000 --> 00:04:28,919 Speaker 1: The problem plus sorry I should say plus also the 95 00:04:28,960 --> 00:04:29,839 Speaker 1: Onslow decision. 96 00:04:30,800 --> 00:04:34,880 Speaker 2: Yeah, the problem there was that not as much investment 97 00:04:34,920 --> 00:04:38,200 Speaker 2: went into gas as needed to. And so that's that's 98 00:04:38,240 --> 00:04:40,479 Speaker 2: fundamentally the problem. I mean, we were always going to 99 00:04:40,560 --> 00:04:44,240 Speaker 2: have droughts and wet dimes and all of that sort 100 00:04:44,240 --> 00:04:45,960 Speaker 2: of stuff. It's just part of our system. We used 101 00:04:45,960 --> 00:04:48,360 Speaker 2: to managing it. Got what I think what caught us 102 00:04:48,360 --> 00:04:50,760 Speaker 2: all that up this year was just the rate of 103 00:04:50,880 --> 00:04:54,680 Speaker 2: decline and gas availability. And so when you saw those 104 00:04:54,760 --> 00:04:57,120 Speaker 2: high prices a few weeks back, eight hundred bucks, that 105 00:04:57,200 --> 00:05:00,560 Speaker 2: was because Faranaki, which is a diesel base generator, was 106 00:05:00,640 --> 00:05:03,000 Speaker 2: running that grow those high prices. Since then, we've got 107 00:05:03,000 --> 00:05:05,280 Speaker 2: method next to the table. We've got ends us off. 108 00:05:05,520 --> 00:05:09,760 Speaker 2: Things are moderating back. They're they're still reasonably high, sort 109 00:05:09,760 --> 00:05:13,640 Speaker 2: of circuit two three hundred dollars, but if we can 110 00:05:13,680 --> 00:05:16,320 Speaker 2: continue to build back these lakes, that will start to 111 00:05:16,360 --> 00:05:17,160 Speaker 2: moderate as well. 112 00:05:17,160 --> 00:05:18,960 Speaker 1: Nearly you would all worried about what might happen to 113 00:05:19,000 --> 00:05:20,839 Speaker 1: your business based on what's going on in politics at 114 00:05:20,880 --> 00:05:23,240 Speaker 1: the moment, and they need to find somebody to scapeging. 115 00:05:26,040 --> 00:05:28,719 Speaker 2: No. No, I think the system works well. I think 116 00:05:28,760 --> 00:05:31,640 Speaker 2: the politicians understand that. But obviously we've got a lot 117 00:05:31,640 --> 00:05:34,360 Speaker 2: of work to do to sort of resolve this gas issue, 118 00:05:34,839 --> 00:05:36,840 Speaker 2: and that's why we've been talking about the al and 119 00:05:36,920 --> 00:05:42,640 Speaker 2: G option. It may be an expensive option, but I 120 00:05:42,640 --> 00:05:45,440 Speaker 2: think it'll be a critical bit of infrastructure that will 121 00:05:45,480 --> 00:05:49,080 Speaker 2: provide a lot more resilience, not only to the electricity sector, 122 00:05:49,080 --> 00:05:52,119 Speaker 2: but all those issues. Is out there who are currently 123 00:05:52,200 --> 00:05:53,279 Speaker 2: being mentioned as well. 124 00:05:53,400 --> 00:05:55,040 Speaker 1: Yeah, hey, Neil, thank you very much. Best of luck 125 00:05:55,080 --> 00:05:57,760 Speaker 1: with everything. As Neil Barklay, Meridian's chief executive. 126 00:05:58,839 --> 00:06:02,000 Speaker 2: For more from Heather dooplasye Allen Drive, Listen live to 127 00:06:02,120 --> 00:06:05,159 Speaker 2: news talks it'd be from four pm weekdays, or follow 128 00:06:05,200 --> 00:06:06,960 Speaker 2: the podcast on iHeartRadio.